| Abstract: |
Rebalancing growth patterns of Asian economies is an important component of
the overall rebalancing effort that will be required in the world economy. In
this paper, I provide an empirical characterization of the composition of GDP
levels and growth rates for the key emerging markets and other developing
economies in Asia. China has by far the lowest share of private consumption to
GDP in Asia and, during this decade, has recorded the lowest rate of
employment growth relative to GDP growth. Investment growth has dominated GDP
growth in China during this decade but is also important in the cases of India
and Vietnam. <br> <br>To examine the global implications of domestic growth
patterns in Asia, I analyze saving-investment balances, the composition of
national savings, and the determinants of the evolution of household saving
rates. During 2000-08, household saving rates (relative to household income)
have risen gradually in China and India but fallen sharply in Korea. Corporate
savings have surged across Asia during this period, becoming the main
component of gross national savings in the region. In terms of sheer
magnitudes, China’s national savings and current account surpluses dominate
the region’s saving-investment balances. China accounts for just under half
of GDP in Asia ex-Japan, but accounts for 60 percent of total gross national
savings and nearly 90 percent of the current account surplus of the region.
Finally, I discuss some policy implications that come out of the analysis on
how to shift the patterns of growth, especially in China, from a
welfare-enhancing perspective. |